indemnity insurance on ex Local Auth. property

Eddys

Hi,

First time posted here and I wish I knew about this site long time ago...

I am interested to buy an ex LA house, current vendor got the house directly from city council 10+something years ago, right to buy I think.

What the homebuyers report revealed -and vendor had no idea- was the removal of an internal wall. The surveyor "didn't see any problems" but suggested checks like whether the local council
has granted building regulation approval for that work, well in fact what I understand was the city council that did that work.....

What I managed to get from surveyor over a very short conversation over phone, is that he thinks that he thinks -without any confirmation - that in a property of this age was likely that the wall was load bearing.

Its since a couple of days ago that my solicitor called me and told me that an indemnity policy will be offered/

What are you thinking guys about this?
Some friends told me that it should be ok as this was ex LA, so was under local council's supervision, I really have no clue..

many thanks

Eddy

Surrey_EA

As it seems the wall was removed at least 10 years ago, I would have thought that any problems would have become apparent long before now, and if your surveyor is happy there are no structural implications then an indemnity policy to cover lack of building regulations completions certificate would be sufficient.

eddddy

There are 2 (or perhaps 3) things that you need to be aware of:

1. Enforcement Action by local authority
But they can only do this within 2 years of completion of work - so if it was done more than 2 years ago, you're fine. (Unless the building is actually dangerous.) See: http://www.planningportal.gov.uk/permission/responsibilities/buildingregulations/failure

2. Structural Problems
It sounds like your surveyor had no concerns about this, so probably no action is needed. But if you are concerned, you could get a structural engineer's report. To do a thorough report, it may be necessary to remove plaster etc.

3. If the property is leasehold - permission from the Freeholder.
Depending on what the lease says, the freeholder could insist that you put the wall back.


The indemnity insurance indemnifies you against point 1 above. (i.e. there is practically zero risk of a claim on the policy, so it's a nice earner for the insurance co. But many mortgage companies insist on it.)

If the work was done by/for the Local Authority, I would be amazed if it didn't have correct building control sign off. (I'd say it's more likely that nobody can find the right paperwork.)

Eddys

Quite useful info, I really appreciate your thoughts.

I was aware - quick chat with solicitor - about what covers indemnity insurance. The property is freehold btw.

What I see from a copy of the deed titles, that family got the house from the local city council 10 years ago, but there are no guarantees when that work done, ie the vendor can say bs, anyway.

If the work was done by/for the Local Authority, I would be amazed if it didn't have correct building control sign off. (I'd say it's more likely that nobody can find the right paperwork.)

I know that sometimes are a bit messy there .

Richard_Webster

1. Enforcement Action by local authority
But they can only do this within 2 years of completion of work - so if it was done more than 2 years ago, you're fine. (Unless the building is actually dangerous.) See: http://www.planningportal.gov.uk/per...ations/failure

True in practice - but not strictly true in theory. In theory the Council could seek an injunction to havew the work removed and restored - there is no timelimit on this as far as I know - but equally I havenever actually heard for a Council doing it.

The fear behind this incredibly uniklley possibility (imagine negative press reaction!) has caused mortgage lenders to get mega careful over the point and they usually insist on a policy, even though it only pays out if enforcement action happens. Doesn't give any protection if there is a structural failure - so you have to re;y on your suyrveyor for that.

So the policy is really onlythere to keep lenders happy because they don't seem to have worked out how unlikley the issue really is in practice.

Eddys

Just to update my original post here...... I received a call from solicitor that the work was completed from city council some 25+ years ago, so what the h*ck, if nothing happened 20ys ago and I don't think the city council did a poor work, seems to me that the indemnity insurance is to please the lender.

AdrianC

Indeed.

B'sides, I can't see that you could get an indemnity policy here anyway. They're only available if the local authority isn't already aware of the works. And they are, since they did it.

If the works were done so badly that the LA might consider enforced reinstatement of the missing load-bearing wall, then the paperwork is the least of your worries. Having the first floor on your head would be a bigger risk.

Eddys

AdrianC wrote: »

Indeed.

B'sides, I can't see that you could get an indemnity policy here anyway. They're only available if the local authority isn't already aware of the works. And they are, since they did it.
.

gosh... LOL, :rotfl: gotta mention this to solicitor next week..